Amid pressure on same-store sales and intensifying competition, Starbucks Corporation (SBUX.US) China will implement "purchase required for seating" starting October 22.

Starbucks Corporation (SBUX.US) is requiring customers to make a purchase before they can sit in its China stores, one of its moves to revive performance in the fiercely competitive mainland market. Starbucks Corporation China said on Wednesday that the new seating policy will take effect nationwide from October 22, and stores will post notices to inform customers of the policy change. "We will continue to invest resources in improving the in-store experience and work with customers to create and maintain a warm 'third place' experience," the company said in a statement. Separately, according to a statement posted on WeChat, Starbucks Corporation China also plans additional investment in fiscal 2027, including adding staff during peak hours, upgrading digital systems and core equipment, and renovating about 1,000 mainland stores. The adjustments come as Starbucks Corporation works to enhance the appeal of its cafes while responding to increasingly intense competition at home. The chain agreed in November last year to sell a majority stake in its China business to private equity firm Boyu Capital at an enterprise value of $4 billion, bringing in a local partner to help plan the next phase of growth. Hurt by fierce competition and price wars, Starbucks Corporation China's same-store sales fell in each of the past two fiscal years. Sales showed signs of recovery earlier this fiscal year, but the business has yet to demonstrate a sustained return to growth as it transitions to the new ownership structure. Starbucks Corporation stopped separately disclosing China results starting from the third quarter ended in June. The seating policy change echoes a move by Starbucks Corporation in the U.S. last year. The company at the time reversed a policy that allowed anyoneeven those who had not purchased food or beveragesto use its cafes, patios and restrooms. Starbucks Corporation said the move was aimed at prioritizing paying customers and introduced a new code of conduct, part of Chief Executive Brian Niccol's efforts to enhance the appeal of its stores. Starbucks Corporation opened its first store in Beijing in 1999 and currently has about 8,000 stores in China. But in recent years its position has come under pressure, including from the rapid expansion of lower-priced local rivals such as Luckin Coffee, Inc. Sponsored ADR Class A, and consumers are increasingly unwilling to pay a premium for foreign brands. Three years ago, Luckin overtook Starbucks Corporation to become China's largest coffee chain, thanks to drinks priced at a fraction of Starbucks Corporation's. As consumers become increasingly cautious about discretionary spending, Starbucks Corporation's larger, more expensive store model is also under pressure.